Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information | |
Entity Registrant Name | Matson, Inc. |
Entity Central Index Key | 3,453 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 42,447,854 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Revenue: | ||||
Ocean Transportation | $ 419.2 | $ 398 | $ 1,181.9 | $ 1,135 |
Logistics | 124.7 | 102.4 | 348.9 | 287.3 |
Total Operating Revenue | 543.9 | 500.4 | 1,530.8 | 1,422.3 |
Costs and Expenses: | ||||
Operating costs | (436.1) | (410.9) | (1,271.2) | (1,177.2) |
Equity in income of related party Terminal Joint Venture | 7.5 | 3.6 | 19.3 | 9.2 |
Selling, general and administrative | (53.5) | (46.4) | (154.8) | (136.9) |
Total Costs and Expenses | (482.1) | (453.7) | (1,406.7) | (1,304.9) |
Operating Income | 61.8 | 46.7 | 124.1 | 117.4 |
Interest expense | (6.2) | (6) | (18.8) | (17.4) |
Income before Income Taxes | 55.6 | 40.7 | 105.3 | 100 |
Income tax expense | (21.5) | (15.4) | (40.2) | (38.6) |
Net Income | 34.1 | 25.3 | 65.1 | 61.4 |
Other Comprehensive Income, Net of Income Taxes: | ||||
Net Income | 34.1 | 25.3 | 65.1 | 61.4 |
Other Comprehensive Income (Loss): | ||||
Net gain in prior service cost | 0.7 | 23.4 | 0.8 | 24.1 |
Amortization of prior service cost included in net periodic pension cost | (2.2) | (0.6) | (2.9) | (1.2) |
Amortization of net loss included in net periodic pension cost | 1 | 0.9 | 3.1 | 3 |
Other adjustments | 0.6 | 0.2 | 0.5 | |
Total Other Comprehensive Income (Loss) | (0.5) | 24.3 | 1.2 | 26.4 |
Comprehensive Income | $ 33.6 | $ 49.6 | $ 66.3 | $ 87.8 |
Basic Earnings Per-Share: (in dollars per share) | $ 0.79 | $ 0.59 | $ 1.51 | $ 1.42 |
Diluted Earnings Per-Share: (in dollars per share) | $ 0.79 | $ 0.59 | $ 1.50 | $ 1.41 |
Weighted Average Number of Shares Outstanding: | ||||
Basic (in shares) | 42.9 | 42.8 | 43 | 43.1 |
Diluted (in shares) | 43.2 | 43.2 | 43.3 | 43.5 |
Dividends | ||||
Cash Dividends Per-Share | $ 0.20 | $ 0.19 | $ 0.58 | $ 0.55 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 24.7 | $ 13.9 |
Accounts receivable, net | 213.9 | 189.5 |
Prepaid expenses and other assets | 64.4 | 70.8 |
Total current assets | 303 | 274.2 |
Long-term Assets: | ||
Investment in related party Terminal Joint Venture | 87.8 | 82.4 |
Property and equipment, net | 1,099.2 | 949.2 |
Goodwill | 323.7 | 323.7 |
Intangible assets, net | 228 | 236.6 |
Capital Construction Fund - cash on deposit | 31.2 | |
Deferred dry-docking costs, net | 95.2 | 89.1 |
Other long-term assets | 30.1 | 29.1 |
Total long-term assets | 1,864 | 1,741.3 |
Total assets | 2,167 | 2,015.5 |
Current Liabilities: | ||
Current portion of debt | 29.2 | 31.8 |
Accounts payable | 172.9 | 170.5 |
Accruals and other liabilities | 82.4 | 75.3 |
Total current liabilities | 284.5 | 277.6 |
Long-term Liabilities: | ||
Long-term debt | 810.1 | 707.1 |
Deferred income taxes | 386.2 | 363.8 |
Employee benefit plans | 66.5 | 71.7 |
Uninsured claims and related liabilities | 42.3 | 40.3 |
Multi-employer withdrawal liability | 58.8 | 60.1 |
Total long-term liabilities | 1,363.9 | 1,243 |
Commitments and Contingencies (Note 2) | ||
Shareholders' Equity: | ||
Common stock | 31.8 | 32.1 |
Additional paid in capital | 285.8 | 289.8 |
Accumulated other comprehensive loss, net | (22.4) | (23.6) |
Retained earnings | 223.4 | 196.6 |
Total shareholders' equity | 518.6 | 494.9 |
Total liabilities and shareholders' equity | $ 2,167 | $ 2,015.5 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net income | $ 65.1 | $ 61.4 |
Reconciling adjustments: | ||
Depreciation and amortization | 74.3 | 71.8 |
Deferred income taxes | 22.3 | 24.7 |
Share-based compensation expense | 7.8 | 9.2 |
Equity in income of related party Terminal Joint Venture | (19.3) | (9.2) |
Cash distribution received from Terminal Joint Venture | 14 | |
Other | 2.1 | 2.1 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (24.3) | (4.8) |
Deferred dry-docking payments | (45.1) | (43.7) |
Deferred dry-docking amortization | 35.7 | 27.8 |
Prepaid expenses and other assets | 4.3 | (27.1) |
Accounts payable, accruals and other liabilities | 14.5 | (27.2) |
Other long-term liabilities | (4.4) | 2.5 |
Net cash provided by operating activities | 147 | 87.5 |
Cash Flows From Investing Activities: | ||
Vessel construction expenditures | (172.2) | (39.2) |
Other capital expenditures | (43.3) | (67.3) |
Proceeds from (payments for) disposal of property and equipment | (0.3) | 2.2 |
Cash deposits into Capital Construction Fund | (64.6) | (123.4) |
Cash withdrawals from Capital Construction Fund | 95.8 | 12.5 |
Payments for membership interests in Span Alaska, net of cash acquired | (112.8) | |
Net cash used in investing activities | (184.6) | (328) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of debt | 200 | |
Repayments of debt and capital leases | (19.5) | (13.7) |
Proceeds from revolving credit facility | 341 | 1,275 |
Repayments of revolving credit facility | (221) | (1,080) |
Payment of financing costs | (1.7) | |
Proceeds from issuance of capital stock | 0.4 | 0.6 |
Dividends paid | (25.2) | (24) |
Repurchase of Matson common stock | (18.4) | (37.8) |
Payments of Span Alaska debt | (81.9) | |
Tax withholding related to net share settlements of restricted stock units | (7.2) | (6.8) |
Net cash used in financing activities | 48.4 | 231.4 |
Net Increase (Decrease) in Cash and Cash Equivalents | 10.8 | (9.1) |
Cash and Cash Equivalents, Beginning of the Period | 13.9 | 25.5 |
Cash and Cash Equivalents, End of the Period | 24.7 | 16.4 |
Supplemental Cash Flow Information: | ||
Interest paid, net of capitalized interest | 20.5 | 15.7 |
Income tax paid (refund) | (0.1) | 16.2 |
Non-cash Information: | ||
Capital expenditures included in accounts payable, accruals and other liabilities | $ 1.5 | $ 12.6 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
DESCRIPTION OF THE BUSINESS | |
DESCRIPTION OF THE BUSINESS | 1. DESCRIPTION OF THE BUSINESS Matson, Inc., a holding company incorporated in January 2012 in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. The Company consists of two segments, Ocean Transportation and Logistics: Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, and to other island economies in Micronesia. MatNav also operates a premium, expedited service from China to Long Beach, California, and provides services to Okinawa, Japan and various islands in the South Pacific. In addition, subsidiaries of MatNav provide container stevedoring, container equipment maintenance and other terminal services for MatNav and other ocean carriers on the Hawaiian Islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak and Dutch Harbor. Matson's fleet of 22 owned vessels and five chartered vessels includes containerships, combination container and roll-on/roll-off ships and custom-designed barges. Matson has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”), a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. SSAT provides terminal and stevedoring services to various carriers at seven terminal facilities on the U.S. West Coast, including to MatNav at four of those facilities (“Terminal Joint Venture”). Matson records its share of income in the Terminal Joint Venture in operating costs in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations. Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides a variety of logistic services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal service, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively "Transportation Brokerage Services"); (ii) less-than-container load consolidation (“LCL”) and freight forwarding services (collectively “Freight Forwarding Services”); (iii) warehousing and distribution services; and (iv) supply chain management and other services. Recent Acquisition: On August 4, 2016, Matson Logistics completed its acquisition of Span Intermediate, LLC (“Span Alaska”), a market leading provider of LCL consolidation and freight forwarding services to Alaska (the “Span Alaska Acquisition”) (see Note 13, Business Combination for additional information on the recent acquisition). |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson and all wholly-owned subsidiaries, after elimination of significant intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. A controlling financial interest is one in which the Company has a majority voting interest or one in which the Company is the primary beneficiary of a variable interest entity. The Company accounts for its investment in the Terminal Joint Venture using the equity method of accounting. The Condensed Consolidated Financial Statements include the accounts and activities of Span Alaska from the acquisition date on August 4, 2016 (see Note 13). Due to the nature of the Company’s operations, including the acquisition of Span Alaska on August 4, 2016, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2017. Fiscal Period: The period end for Matson covered by this report is September 30, 2017. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in September, or September 29, 2017, for the third quarter 2017. Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Immaterial Correction of an Error in Previously Issued Financial Statements: Subsequent to the filing of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, the Company identified an error related to its post-retirement benefit plan liabilities. The Company did not account for the transfer of certain participants belonging to three stevedore union groups in Hawaii, out of the Company’s post-retirement benefit plan and into a multi-employer Stevedore Industry Committee Welfare Benefit Plan (“SIC Plan”), that was approved by the Board of the SIC Plan in August 2016 (the “Transfer”). The SIC Plan assumed the existing unfunded obligation related to the transferred participants who continue to receive substantially the same post-retirement benefits that they previously received under the Company’s post-retirement benefit plan. The Company determined that the Transfer should have been accounted for in August 2016 when the Transfer was approved by the SIC Board as a negative plan amendment in accordance with Accounting Standards Codification (“ASC”) 715-60, Defined Benefit Plans – Other Postretirements since the Company retains significant risks related to the obligation for the transferred participants’ benefits, and will continue to participate in the funding of the transferred benefit obligation through ongoing and increased contributions to the SIC Plan. Accordingly, the Company corrected this error by recording a decrease of $36.8 million in employee benefit plan liabilities and $1.6 million in accruals and other liabilities, with a corresponding net gain in prior service costs of $22.5 million in a ccumulated other comprehensive loss (gain), net of $15.0 million of deferred income taxes, and a $0.9 million increase in retained earnings as of December 31, 2016. The net gain in prior service costs included in accumulated other comprehensive loss will be amortized over a period of approximately 10 years. The correction for the amortization of the net gain in prior service costs resulted in an increase in Ocean Transportation segment operating income of $0.5 million, and income tax expense of $0.2 million in the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2016. The Company believes the correction of this error is immaterial to previously issued Consolidated Financial Statements for prior periods. The misstatement had no impact on the Company’s Condensed Consolidated Statements of Cash Flows. Reclassifications: Certain amounts included within cash flows from operating activities of the Condensed Consolidated Statement of Cash Flow for the nine months ended September 30, 2016, have been reclassified to conform to the current period presentation. There was no change in net cash provided by operating activities for the nine months ended September 30, 2016. New Accounting Pronouncements: Revenue from Contracts with Customers: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). ASU 2014-09 establishes principles regarding the nature, timing, and uncertainty of revenue from contracts with customers. It removes inconsistencies in existing revenue requirements, provides a more robust framework for addressing revenue issues and improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. ASU 2014-09 will be effective for interim and annual reporting periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of adopting ASU 2014-09 on its Consolidated Financial Statements. The Company is currently reviewing customer contracts in each of its operating segments for all revenue generating services provided by the Company, and is assessing the impact of applying ASU 2014-09, and comparing this to the Company’s historical revenue recognition practices. Based upon the preliminary review of customer contracts, the Company believes that the Company’s revenue recognition policies are consistent with the requirements of ASU 2014-09. While the Company continues to assess all potential impacts of adopting ASU 2014-09, based upon information available to date, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on either the timing or recognition of Ocean Transportation and Logistics revenues. The Company is also evaluating its accounting disclosures related to revenue recognition. The Company plans to adopt the requirements of the new standard by recording the impact of adoption as an adjustment to retained earnings at the beginning of the first quarter of 2018. Leases: In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ” (“ASU 2016-02”), which requires lessees to record most leases on their balance sheets but recognize the expenses on their statements of income in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments, and a right-of-use asset for the underlying leased asset for the period of the lease term. ASU 2016-02 will be effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. The Company is in the process of evaluating the impact of adopting ASU 2016-02. Net Periodic Pension Cost and Benefit Cost: In March 2017, the FASB issued ASU 2017-07. “ Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Benefit Cost (“ASU 2017-07”). ASU 2017-07 requires employees that sponsor defined benefit pension and other post-retirement plans to present the service cost component of net benefit cost in the same income statement line item as other employee compensation costs arising from services rendered, and that only the service cost component will be eligible for capitalization. The other components of the net periodic benefit cost must be presented separately from the line item that includes the service cost component and outside of the income from operations subtotal. ASU 2017-07 is effective for interim and annual periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-07 to have a significant impact on the Company’s Consolidated Financial Statements. Contingencies: Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 9 Months Ended |
Sep. 30, 2017 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 3. REPORTABLE SEGMENTS Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company's chief operating decision maker is its Chief Executive Officer. The Company consists of two reportable segments, Ocean Transportation and Logistics, which are further described in Note 1. Reportable segments are measured based on operating income, exclusive of interest expense and income taxes. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service. The Company’s Terminal Joint Venture segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of the Terminal Joint Venture being an integral part of the Company’s Ocean Transportation business. The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment. Accordingly, inter-segment revenue of $12.6 million and $6.7 million for the three months ended September 30, 2017 and 2016, respectively, and $32.0 million and $10. 3 million for the nine months ended September 30, 2017 and 2016, respectively, have been eliminated from Logistics segment operating revenue in the table below. Reportable segment results for the three and nine months ended September 30, 2017 and 2016 were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Operating Revenue: Ocean Transportation $ 419.2 $ 398.0 $ 1,181.9 $ 1,135.0 Logistics (1) 124.7 102.4 348.9 287.3 Total Operating Revenue $ 543.9 $ 500.4 $ 1,530.8 $ 1,422.3 Operating Income: Ocean Transportation $ 54.6 $ 43.2 $ 108.1 $ 110.1 Logistics (1) 7.2 3.5 16.0 7.3 Total Operating Income 61.8 46.7 124.1 117.4 Interest expense, net (6.2) (6.0) (18.8) (17.4) Income before Income Taxes 55.6 40.7 105.3 100.0 Income taxes (21.5) (15.4) (40.2) (38.6) Net Income $ 34.1 $ 25.3 $ 65.1 $ 61.4 (1) Logistics operating results include Span Alaska operating results from the date of acquisition on August 4, 2016. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, (In millions) 2017 2016 Cost: Vessels $ 1,430.8 $ 1,416.1 Containers and equipment 543.2 536.9 Terminal facilities and other property 58.9 43.2 Vessel construction in progress 296.7 124.5 Other construction in progress 26.9 31.2 Total Property and Equipment 2,356.5 2,151.9 Less: Accumulated Deprecation Total Property and Equipment, net $ 1,099.2 $ 949.2 Vessel construction in progress relates to progress payments paid for the construction of four new vessels to be used within the Hawaii service, and includes capitalized interest of $7.4 million and $2.9 million at September 30, 2017 and December 31, 2016, respectively. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 9 Months Ended |
Sep. 30, 2017 | |
GOODWILL AND INTANGIBLES | |
GOODWILL AND INTANGIBLES | 5. GOODWILL AND INTANGIBLES Changes in goodwill for the three and nine months ended September 30, 2017 and 2016 consisted of the following: Goodwill Ocean (In millions) Transportation Logistics Total Balance at December 31, 2016 $ 218.5 $ 105.2 $ 323.7 Additions — — — Balance at March 31, 2017 218.5 105.2 323.7 Additions — — — Balance at June 30, 2017 218.5 105.2 323.7 Additions — — — Balance at September 30, 2017 $ 218.5 $ 105.2 $ 323.7 Goodwill Ocean Transportation Logistics Total Balance at December 31, 2015 $ 215.0 $ 26.6 $ 241.6 Additions — — — Balance at March 31, 2016 215.0 26.6 241.6 Additions 3.5 — 3.5 Balance at June 30, 2016 218.5 26.6 245.1 Additions — 79.0 79.0 Balance at September 30, 2016 $ 218.5 $ 105.6 $ 324.1 Intangible assets at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, (In millions) 2017 2016 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (30.0) (21.4) Total Customer Relationships, net 200.7 209.3 Trade name - Logistics 27.3 27.3 Total Intangible Assets, net $ 228.0 $ 236.6 |
CAPITAL CONSTRUCTION FUND
CAPITAL CONSTRUCTION FUND | 9 Months Ended |
Sep. 30, 2017 | |
CAPITAL CONSTRUCTION FUND. | |
CAPITAL CONSTRUCTION FUND | 6. CAPITAL CONSTRUCTION FUND The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. As of September 30, 2017 and December 31, 2016, the following amounts related to the Company’s CCF: September 30, December 31, (In millions) 2017 2016 Capital Construction Fund: Cash on deposit $ — $ 31.2 Assigned accounts receivables $ 175.9 $ 174.7 Cash on deposit in the CCF are held in a money market account and classified as long-term assets in the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals to fund long-term investment in the construction of new vessels. During the three and nine months ended September 30, 2017, the Company deposited $52.4 million and $64.6 million into the CCF, and made qualifying cash withdrawals of $52.4 million and $95.8 million from the CCF, respectively. Eligible accounts receivable that are assigned into the CCF are classified as part of accounts receivable in the Condensed Consolidated Financial Statements due to the nature of the assignment. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | 7. DEBT At September 30, 2017 and December 31, 2016, the Company’s debt consisted of the following: September 30, December 31, (In millions) 2017 2016 Term Loans: 5.79 %, payable through 2020 $ $ 24.5 3.66 %, payable through 2023 59.3 4.16 %, payable through 2027 55.0 3.37 %, payable through 2027 75.0 3.14 %, payable through 2031 200.0 4.31 %, payable through 2032 37.5 4.35 %, payable through 2044 100.0 3.92 %, payable through 2045 75.0 Title XI Bonds: 5.34 %, payable through 2028 26.4 5.27 %, payable through 2029 28.6 Revolving credit facility 55.0 Capital leases 2.6 Total Debt 839.3 738.9 Less: Current portion (31.8) Total Long-term Debt $ 810.1 $ 707.1 The Company’s debt is described in Note 8 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, and in Part I, Financial Information of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, except as described below. Classification of Borrowings: Borrowings under the revolving credit facility is classified as long-term debt in the Condensed Consolidated Balance Sheets, as principal payments are not required until the maturity date of June 29, 2022. As of September 30, 2017, the Company had $464.5 million of remaining availability under the revolving credit facility. The interest rate on borrowings under the revolving credit facility approximated 2.69 percent during the three months ended September 30, 2017. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 8. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2017 were as follows: Accumulated Non- Other Post Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2016 $ (41.4) $ 18.1 $ (0.4) $ 0.1 $ (23.6) Amortization of prior service cost (0.4) — — — (0.4) Amortization of net loss 0.8 0.1 — — 0.9 Other adjustments — — — 0.2 0.2 Balance at March 31, 2017 (41.0) 18.2 (0.4) 0.3 (22.9) Net gain in prior service costs — — — 0.1 0.1 Amortization of prior service cost (0.3) — — — (0.3) Amortization of net loss 0.8 0.3 0.1 — 1.2 Balance at June 30, 2017 (40.5) 18.5 (0.3) 0.4 (21.9) Net gain in prior service costs — 0.7 — — 0.7 Amortization of prior service cost (0.4) (1.7) (0.1) — (2.2) Amortization of net loss 0.8 0.2 — — 1.0 Balance at September 30, 2017 $ (40.1) $ 17.7 $ (0.4) $ 0.4 $ (22.4) The balance for post-retirement at December 31, 2016 has been corrected for the adjustment described in Note 2, Immaterial Correction of an Error in Previously Issued Financial Statements . Changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2016 were as follows: Accumulated Non- Other Post Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2015 $ (41.7) $ (4.7) $ (0.2) $ (0.3) $ (46.9) Net gain in prior service costs — 0.7 — — 0.7 Amortization of prior service cost (0.4) — — — (0.4) Amortization of net loss 0.8 0.2 0.1 — 1.1 Other adjustments — — — (0.1) (0.1) Balance at March 31, 2016 (41.3) (3.8) (0.1) $ (0.4) (45.6) Amortization of prior service cost (0.3) — 0.1 — (0.2) Amortization of net loss 0.8 0.2 — — 1.0 Balance at June 30, 2016 (40.8) (3.6) — (0.4) (44.8) Net gain in prior service costs — 23.4 — — 23.4 Amortization of prior service cost (0.3) (0.3) — — (0.6) Amortization of net loss (gain) 0.8 0.2 (0.1) — 0.9 Other adjustments — — — 0.6 0.6 Balance at September 30, 2016 $ (40.3) $ 19.7 $ (0.1) $ 0.2 $ (20.5) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The Company uses Level 1 inputs for the fair values of its cash equivalents, and Level 2 inputs for its CCF – cash on deposit, and variable and fixed rate debt. The fair values of cash and cash equivalents, CCF – cash on deposit, and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of the Company’s fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. The carrying value and fair value of the Company’s financial instruments as of September 30, 2017 and December 31, 2016 were as follows: Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) September 30, 2017 Fair Value Measurements at September 30, 2017 Cash and cash equivalents $ 24.7 $ 24.7 $ 24.7 $ — $ — Variable rate debt 175.0 175.0 — 175.0 — Fixed rate debt 664.3 664.1 — 664.1 — (In millions) December 31, 2016 Fair Value Measurements at December 31, 2016 Cash and cash equivalents $ 13.9 $ 13.9 $ 13.9 $ — $ — CCF - cash on deposit 31.2 31.2 — 31.2 — Variable rate debt 55.0 55.0 — 55.0 — Fixed rate debt 683.9 685.2 — 685.2 — |
EARNINGS PER-SHARE
EARNINGS PER-SHARE | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER-SHARE | |
EARNINGS PER-SHARE | 10. EARNINGS PER-SHARE The number of shares used to compute basic and diluted earnings per-share for the three and nine months ended September 30, 2017 and 2016, was as follows: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Weighted- Per Weighted- Per Average Common Average Common Net Common Share Net Common Share (In millions, except per-share amounts) Income Shares Amount Income Shares Amount Basic: $ 34.1 42.9 $ 0.79 $ 65.1 43.0 $ 1.51 Effect of Dilutive Securities: 0.3 — 0.3 (0.01) Diluted: $ 34.1 43.2 $ 0.79 $ 65.1 43.3 $ 1.50 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Weighted- Per Weighted- Per Average Common Average Common Net Common Share Net Common Share (In millions, except per-share amounts) Income Shares Amount Income Shares Amount Basic: $ 25.3 42.8 $ 0.59 $ 61.4 43.1 $ 1.42 Effect of Dilutive Securities: 0.4 — 0.4 (0.01) Diluted: $ 25.3 43.2 $ 0.59 $ 61.4 43.5 $ 1.41 Basic earnings per-share is determined by dividing net income by the weighted-average common shares outstanding during the period. The calculation of diluted earnings per-share includes the dilutive effect of unexercised non-qualified stock options and non-vested restricted stock units. The computation of weighted-average dilutive shares outstanding excludes certain non-qualified stock options to purchase shares of common stock where the options’ exercise prices were greater than the average market price of the Company’s common stock for the periods presented and, therefore, the effect would be anti-dilutive. The number of such shares excluded was nominal. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 11. SHARE-BASED COMPENSATION During the three and nine months ended September 30, 2017, the Company granted approximately 6,900 and 304,000 in total of time-based restricted stock units and performance-based shares to certain of its employees at a weighted-average grant date fair value of $24.02 and $35.99, respectively. Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $2.9 million and $3.0 million for the three months ended September 30, 2017 and 2016, and $7.8 million and $9.2 million for the nine months ended September 30, 2017 and 2016, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was $12.5 million at September 30, 2017, and is expected to be recognized over a weighted-average period of 1.3 years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT PLANS | 9 Months Ended |
Sep. 30, 2017 | |
PENSION AND OTHER POST-RETIREMENT PLANS | |
PENSION AND OTHER POST-RETIREMENT PLANS | 12. PENSION AND OTHER POST-RETIREMENT PLANS The Company sponsors qualified defined benefit pension and other post-retirement plans (collectively, the “Plans”). The following table provides the components of net periodic benefit cost (benefit) for the Plans for the nine months ended September 30, 2017 and 2016: Pension Benefits Other Post-retirement Benefits September 30, September 30, (In millions) 2017 2016 2017 2016 Components of Net Periodic Benefit Cost (Benefit): Service cost $ 3.0 $ 3.0 $ 0.4 $ 1.1 Interest cost 7.3 7.3 0.8 2.0 Expected return on plan assets (10.1) (10.0) — — Amortization of net loss 3.8 4.1 0.9 0.9 Amortization of prior service cost (credit) (1.7) (1.7) (2.8) — Other adjustments 0.1 — — — Net periodic benefit cost $ 2.4 $ 2.7 $ (0.7) $ 4.0 During the nine months ended September 30, 2017, the Company contributed $3.0 million to its defined benefit pension plans. No further contributions are expected for 2017. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2017 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 13. BUSINESS COMBINATION Span Alaska Acquisition: On August 4, 2016 (the “Effective Date”), Matson Logistics completed the purchase of 100 percent of the membership interests of Span Alaska pursuant to the terms of the Membership Interest Purchase Agreement. At the Effective Date, Span Alaska became a wholly-owned subsidiary of Matson Logistics. Span Alaska is an asset-light logistics company providing freight forwarding services primarily to the Alaska market. Span Alaska consolidates freight in Auburn, Washington, for shipment to Alaska and distribution through a network of terminals in Anchorage, Fairbanks, Wasilla, Kenai, Juneau and Kodiak. Span Alaska’s operations are recorded within the Logistics segment of the Company. Total consideration for the Span Alaska Acquisition was $198.9 million based on the fair value of membership interests of $117.0 million, and Span Alaska’s debt and accrued interest of $81.9 million. Immediately following the close of the Span Alaska Acquisition, the Company paid the assumed debt. The Span Alaska Acquisition was accounted for as a business combination in accordance with ASC 805, “ Business Combination” (“ASC 805”). The assets acquired and liabilities assumed in the Span Alaska Acquisition were recorded based on fair value estimates as of the Effective Date, with the remaining unallocated purchase price of $78.6 million recorded as goodwill. As of December 31, 2016, the purchase price accounting for the Span Alaska Acquisition was considered final. The Company's Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2017, include operating revenue of $15.3 million and $44.1 million (after elimination of intercompany revenue of $9.5 million and $24.0 million), and operating income of $4.6 million and $10.5 million, from Span Alaska’s operations, respectively. One-time acquisition related costs incurred post December 31, 2016 were not material. Pro Forma Financial Information (Unaudited): The following unaudited pro forma financial information presents the combined operating results of the Company and Span Alaska, as if the Span Alaska Acquisition had been completed at the beginning of each period presented below. The unaudited pro forma financial information includes the accounting effects of the business combination, including the amortization of intangible assets, depreciation of property and equipment, and interest expense. Unaudited pro forma operating revenue is presented after elimination of intercompany revenue. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the result of operations that would have been achieved if the Span Alaska Acquisition had taken place at the beginning of the periods presented, nor should it be taken as an indication of our future consolidated results of operations. (Unaudited) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per-share amount) 2017 2016 2017 2016 Pro Forma Combined: Operating revenue $ 543.9 $ 505.4 $ 1,530.8 $ 1,454.9 Net income after income tax expense $ 34.1 $ 26.6 $ 65.1 $ 65.3 Basic Earnings Per-Share: $ 0.79 $ 0.62 $ 1.51 $ 1.52 Diluted Earnings Per-Share: $ 0.79 $ 0.62 $ 1.50 $ 1.50 Weighted-Average Number of Shares Outstanding: Basic 42.9 42.8 43.0 43.1 Diluted 43.2 43.2 43.3 43.5 |
SIGNIFICANT ACCOUNTING POLICI18
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson and all wholly-owned subsidiaries, after elimination of significant intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. A controlling financial interest is one in which the Company has a majority voting interest or one in which the Company is the primary beneficiary of a variable interest entity. The Company accounts for its investment in the Terminal Joint Venture using the equity method of accounting. The Condensed Consolidated Financial Statements include the accounts and activities of Span Alaska from the acquisition date on August 4, 2016 (see Note 13). Due to the nature of the Company’s operations, including the acquisition of Span Alaska on August 4, 2016, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2017. |
Fiscal Period | Fiscal Period: The period end for Matson covered by this report is September 30, 2017. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in September, or September 29, 2017, for the third quarter 2017. |
Significant Accounting Policies | Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Immaterial Correction of an Error in Previously Issued Financial Statements | Immaterial Correction of an Error in Previously Issued Financial Statements: Subsequent to the filing of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, the Company identified an error related to its post-retirement benefit plan liabilities. The Company did not account for the transfer of certain participants belonging to three stevedore union groups in Hawaii, out of the Company’s post-retirement benefit plan and into a multi-employer Stevedore Industry Committee Welfare Benefit Plan (“SIC Plan”), that was approved by the Board of the SIC Plan in August 2016 (the “Transfer”). The SIC Plan assumed the existing unfunded obligation related to the transferred participants who continue to receive substantially the same post-retirement benefits that they previously received under the Company’s post-retirement benefit plan. The Company determined that the Transfer should have been accounted for in August 2016 when the Transfer was approved by the SIC Board as a negative plan amendment in accordance with Accounting Standards Codification (“ASC”) 715-60, Defined Benefit Plans – Other Postretirements since the Company retains significant risks related to the obligation for the transferred participants’ benefits, and will continue to participate in the funding of the transferred benefit obligation through ongoing and increased contributions to the SIC Plan. Accordingly, the Company corrected this error by recording a decrease of $36.8 million in employee benefit plan liabilities and $1.6 million in accruals and other liabilities, with a corresponding net gain in prior service costs of $22.5 million in a ccumulated other comprehensive loss (gain), net of $15.0 million of deferred income taxes, and a $0.9 million increase in retained earnings as of December 31, 2016. The net gain in prior service costs included in accumulated other comprehensive loss will be amortized over a period of approximately 10 years. The correction for the amortization of the net gain in prior service costs resulted in an increase in Ocean Transportation segment operating income of $0.5 million, and income tax expense of $0.2 million in the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2016. The Company believes the correction of this error is immaterial to previously issued Consolidated Financial Statements for prior periods. The misstatement had no impact on the Company’s Condensed Consolidated Statements of Cash Flows. |
Reclassifications | Reclassifications: Certain amounts included within cash flows from operating activities of the Condensed Consolidated Statement of Cash Flow for the nine months ended September 30, 2016, have been reclassified to conform to the current period presentation. There was no change in net cash provided by operating activities for the nine months ended September 30, 2016. |
New Accounting Pronouncements | New Accounting Pronouncements: Revenue from Contracts with Customers: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). ASU 2014-09 establishes principles regarding the nature, timing, and uncertainty of revenue from contracts with customers. It removes inconsistencies in existing revenue requirements, provides a more robust framework for addressing revenue issues and improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. ASU 2014-09 will be effective for interim and annual reporting periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of adopting ASU 2014-09 on its Consolidated Financial Statements. The Company is currently reviewing customer contracts in each of its operating segments for all revenue generating services provided by the Company, and is assessing the impact of applying ASU 2014-09, and comparing this to the Company’s historical revenue recognition practices. Based upon the preliminary review of customer contracts, the Company believes that the Company’s revenue recognition policies are consistent with the requirements of ASU 2014-09. While the Company continues to assess all potential impacts of adopting ASU 2014-09, based upon information available to date, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on either the timing or recognition of Ocean Transportation and Logistics revenues. The Company is also evaluating its accounting disclosures related to revenue recognition. The Company plans to adopt the requirements of the new standard by recording the impact of adoption as an adjustment to retained earnings at the beginning of the first quarter of 2018. Leases: In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ” (“ASU 2016-02”), which requires lessees to record most leases on their balance sheets but recognize the expenses on their statements of income in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments, and a right-of-use asset for the underlying leased asset for the period of the lease term. ASU 2016-02 will be effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. The Company is in the process of evaluating the impact of adopting ASU 2016-02. Net Periodic Pension Cost and Benefit Cost: In March 2017, the FASB issued ASU 2017-07. “ Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Benefit Cost (“ASU 2017-07”). ASU 2017-07 requires employees that sponsor defined benefit pension and other post-retirement plans to present the service cost component of net benefit cost in the same income statement line item as other employee compensation costs arising from services rendered, and that only the service cost component will be eligible for capitalization. The other components of the net periodic benefit cost must be presented separately from the line item that includes the service cost component and outside of the income from operations subtotal. ASU 2017-07 is effective for interim and annual periods beginning after December 15, 2017. The Company does not expect the adoption of ASU 2017-07 to have a significant impact on the Company’s Consolidated Financial Statements. |
Contingencies | Contingencies: Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2017 2016 2017 2016 Operating Revenue: Ocean Transportation $ 419.2 $ 398.0 $ 1,181.9 $ 1,135.0 Logistics (1) 124.7 102.4 348.9 287.3 Total Operating Revenue $ 543.9 $ 500.4 $ 1,530.8 $ 1,422.3 Operating Income: Ocean Transportation $ 54.6 $ 43.2 $ 108.1 $ 110.1 Logistics (1) 7.2 3.5 16.0 7.3 Total Operating Income 61.8 46.7 124.1 117.4 Interest expense, net (6.2) (6.0) (18.8) (17.4) Income before Income Taxes 55.6 40.7 105.3 100.0 Income taxes (21.5) (15.4) (40.2) (38.6) Net Income $ 34.1 $ 25.3 $ 65.1 $ 61.4 Logistics operating results include Span Alaska operating results from the date of acquisition on August 4, 2016. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | September 30, December 31, (In millions) 2017 2016 Cost: Vessels $ 1,430.8 $ 1,416.1 Containers and equipment 543.2 536.9 Terminal facilities and other property 58.9 43.2 Vessel construction in progress 296.7 124.5 Other construction in progress 26.9 31.2 Total Property and Equipment 2,356.5 2,151.9 Less: Accumulated Deprecation Total Property and Equipment, net $ 1,099.2 $ 949.2 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
GOODWILL AND INTANGIBLES | |
Schedule of goodwill | Changes in goodwill for the three and nine months ended September 30, 2017 and 2016 consisted of the following: Goodwill Ocean (In millions) Transportation Logistics Total Balance at December 31, 2016 $ 218.5 $ 105.2 $ 323.7 Additions — — — Balance at March 31, 2017 218.5 105.2 323.7 Additions — — — Balance at June 30, 2017 218.5 105.2 323.7 Additions — — — Balance at September 30, 2017 $ 218.5 $ 105.2 $ 323.7 Goodwill Ocean Transportation Logistics Total Balance at December 31, 2015 $ 215.0 $ 26.6 $ 241.6 Additions — — — Balance at March 31, 2016 215.0 26.6 241.6 Additions 3.5 — 3.5 Balance at June 30, 2016 218.5 26.6 245.1 Additions — 79.0 79.0 Balance at September 30, 2016 $ 218.5 $ 105.6 $ 324.1 |
Schedule of intangible assets | Intangible assets at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, (In millions) 2017 2016 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (30.0) (21.4) Total Customer Relationships, net 200.7 209.3 Trade name - Logistics 27.3 27.3 Total Intangible Assets, net $ 228.0 $ 236.6 |
CAPITAL CONSTRUCTION FUND (Tabl
CAPITAL CONSTRUCTION FUND (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
CAPITAL CONSTRUCTION FUND. | |
Schedule of capital construction fund | September 30, December 31, (In millions) 2017 2016 Capital Construction Fund: Cash on deposit $ — $ 31.2 Assigned accounts receivables $ 175.9 $ 174.7 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of debt | At September 30, 2017 and December 31, 2016, the Company’s debt consisted of the following: September 30, December 31, (In millions) 2017 2016 Term Loans: 5.79 %, payable through 2020 $ $ 24.5 3.66 %, payable through 2023 59.3 4.16 %, payable through 2027 55.0 3.37 %, payable through 2027 75.0 3.14 %, payable through 2031 200.0 4.31 %, payable through 2032 37.5 4.35 %, payable through 2044 100.0 3.92 %, payable through 2045 75.0 Title XI Bonds: 5.34 %, payable through 2028 26.4 5.27 %, payable through 2029 28.6 Revolving credit facility 55.0 Capital leases 2.6 Total Debt 839.3 738.9 Less: Current portion (31.8) Total Long-term Debt $ 810.1 $ 707.1 |
ACCUMULATED OTHER COMPREHENSI24
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in accumulated other comprehensive loss by component, net of tax | Changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2017 were as follows: Accumulated Non- Other Post Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2016 $ (41.4) $ 18.1 $ (0.4) $ 0.1 $ (23.6) Amortization of prior service cost (0.4) — — — (0.4) Amortization of net loss 0.8 0.1 — — 0.9 Other adjustments — — — 0.2 0.2 Balance at March 31, 2017 (41.0) 18.2 (0.4) 0.3 (22.9) Net gain in prior service costs — — — 0.1 0.1 Amortization of prior service cost (0.3) — — — (0.3) Amortization of net loss 0.8 0.3 0.1 — 1.2 Balance at June 30, 2017 (40.5) 18.5 (0.3) 0.4 (21.9) Net gain in prior service costs — 0.7 — — 0.7 Amortization of prior service cost (0.4) (1.7) (0.1) — (2.2) Amortization of net loss 0.8 0.2 — — 1.0 Balance at September 30, 2017 $ (40.1) $ 17.7 $ (0.4) $ 0.4 $ (22.4) The balance for post-retirement at December 31, 2016 has been corrected for the adjustment described in Note 2, Immaterial Correction of an Error in Previously Issued Financial Statements . Changes in accumulated other comprehensive loss by component, net of tax, for the nine months ended September 30, 2016 were as follows: Accumulated Non- Other Post Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2015 $ (41.7) $ (4.7) $ (0.2) $ (0.3) $ (46.9) Net gain in prior service costs — 0.7 — — 0.7 Amortization of prior service cost (0.4) — — — (0.4) Amortization of net loss 0.8 0.2 0.1 — 1.1 Other adjustments — — — (0.1) (0.1) Balance at March 31, 2016 (41.3) (3.8) (0.1) $ (0.4) (45.6) Amortization of prior service cost (0.3) — 0.1 — (0.2) Amortization of net loss 0.8 0.2 — — 1.0 Balance at June 30, 2016 (40.8) (3.6) — (0.4) (44.8) Net gain in prior service costs — 23.4 — — 23.4 Amortization of prior service cost (0.3) (0.3) — — (0.6) Amortization of net loss (gain) 0.8 0.2 (0.1) — 0.9 Other adjustments — — — 0.6 0.6 Balance at September 30, 2016 $ (40.3) $ 19.7 $ (0.1) $ 0.2 $ (20.5) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value measurement | The carrying value and fair value of the Company’s financial instruments as of September 30, 2017 and December 31, 2016 were as follows: Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) September 30, 2017 Fair Value Measurements at September 30, 2017 Cash and cash equivalents $ 24.7 $ 24.7 $ 24.7 $ — $ — Variable rate debt 175.0 175.0 — 175.0 — Fixed rate debt 664.3 664.1 — 664.1 — (In millions) December 31, 2016 Fair Value Measurements at December 31, 2016 Cash and cash equivalents $ 13.9 $ 13.9 $ 13.9 $ — $ — CCF - cash on deposit 31.2 31.2 — 31.2 — Variable rate debt 55.0 55.0 — 55.0 — Fixed rate debt 683.9 685.2 — 685.2 — |
EARNINGS PER-SHARE (Tables)
EARNINGS PER-SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER-SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Weighted- Per Weighted- Per Average Common Average Common Net Common Share Net Common Share (In millions, except per-share amounts) Income Shares Amount Income Shares Amount Basic: $ 34.1 42.9 $ 0.79 $ 65.1 43.0 $ 1.51 Effect of Dilutive Securities: 0.3 — 0.3 (0.01) Diluted: $ 34.1 43.2 $ 0.79 $ 65.1 43.3 $ 1.50 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Weighted- Per Weighted- Per Average Common Average Common Net Common Share Net Common Share (In millions, except per-share amounts) Income Shares Amount Income Shares Amount Basic: $ 25.3 42.8 $ 0.59 $ 61.4 43.1 $ 1.42 Effect of Dilutive Securities: 0.4 — 0.4 (0.01) Diluted: $ 25.3 43.2 $ 0.59 $ 61.4 43.5 $ 1.41 |
PENSION AND OTHER POST-RETIRE27
PENSION AND OTHER POST-RETIREMENT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PENSION AND OTHER POST-RETIREMENT PLANS | |
Components of net periodic benefit costs (benefit) | The following table provides the components of net periodic benefit cost (benefit) for the Plans for the nine months ended September 30, 2017 and 2016: Pension Benefits Other Post-retirement Benefits September 30, September 30, (In millions) 2017 2016 2017 2016 Components of Net Periodic Benefit Cost (Benefit): Service cost $ 3.0 $ 3.0 $ 0.4 $ 1.1 Interest cost 7.3 7.3 0.8 2.0 Expected return on plan assets (10.1) (10.0) — — Amortization of net loss 3.8 4.1 0.9 0.9 Amortization of prior service cost (credit) (1.7) (1.7) (2.8) — Other adjustments 0.1 — — — Net periodic benefit cost $ 2.4 $ 2.7 $ (0.7) $ 4.0 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
BUSINESS COMBINATION | |
Schedule of pro forma financial information | (Unaudited) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per-share amount) 2017 2016 2017 2016 Pro Forma Combined: Operating revenue $ 543.9 $ 505.4 $ 1,530.8 $ 1,454.9 Net income after income tax expense $ 34.1 $ 26.6 $ 65.1 $ 65.3 Basic Earnings Per-Share: $ 0.79 $ 0.62 $ 1.51 $ 1.52 Diluted Earnings Per-Share: $ 0.79 $ 0.62 $ 1.50 $ 1.50 Weighted-Average Number of Shares Outstanding: Basic 42.9 42.8 43.0 43.1 Diluted 43.2 43.2 43.3 43.5 |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 9 Months Ended |
Sep. 30, 2017segmentfacilityitem | |
DESCRIPTION OF THE BUSINESS | |
Number of reportable segments | segment | 2 |
Number of owned vessels in fleet | item | 22 |
Number of chartered vessels | item | 5 |
Ocean Transportation | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Ownership interest in SSAT (as a percent) | 35.00% |
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | facility | 7 |
MatNav | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | facility | 4 |
SIGNIFICANT ACCOUNTING POLICI30
SIGNIFICANT ACCOUNTING POLICIES - (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Decrease in employee benefit plan liabilities | $ (66.5) | $ (66.5) | $ (71.7) | ||
Decrease in accruals and other liabilities | (82.4) | (82.4) | (75.3) | ||
Net gain (loss) in prior service cost | 0.7 | $ 23.4 | 0.8 | $ 24.1 | |
Increase in retained earnings | 223.4 | 223.4 | 196.6 | ||
Operating Income (Loss) | 61.8 | 46.7 | 124.1 | 117.4 | |
Income tax expense | 21.5 | 15.4 | 40.2 | 38.6 | |
Operating segments | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Operating Income (Loss) | 61.8 | 46.7 | 124.1 | 117.4 | |
Operating segments | Ocean Transportation | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Operating Income (Loss) | $ 54.6 | $ 43.2 | 108.1 | $ 110.1 | |
Revision of Defined Benefit Plan Liabilities | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Decrease in employee benefit plan liabilities | 36.8 | ||||
Decrease in accruals and other liabilities | 1.6 | ||||
Net gain (loss) in prior service cost | 22.5 | ||||
Deferred income taxes | 15 | ||||
Increase in retained earnings | $ 0.9 | ||||
Amortization period of unrecognized gains | 10 years | ||||
Revision of Defined Benefit Plan Liabilities | Operating segments | Ocean Transportation | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Operating Income (Loss) | 0.5 | ||||
Income tax expense | $ 0.2 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment results | ||||
Number of segments | segment | 2 | |||
Operating Revenue | $ 543.9 | $ 500.4 | $ 1,530.8 | $ 1,422.3 |
Operating Income | 61.8 | 46.7 | 124.1 | 117.4 |
Interest expense, net | (6.2) | (6) | (18.8) | (17.4) |
Income before Income Taxes | 55.6 | 40.7 | 105.3 | 100 |
Income taxes | (21.5) | (15.4) | (40.2) | (38.6) |
Net Income | 34.1 | 25.3 | 65.1 | 61.4 |
Operating segments | ||||
Segment results | ||||
Operating Income | 61.8 | 46.7 | 124.1 | 117.4 |
Intersegment Eliminations | ||||
Segment results | ||||
Operating Revenue | 12.6 | 6.7 | 32 | 10.3 |
Ocean Transportation | Operating segments | ||||
Segment results | ||||
Operating Revenue | 419.2 | 398 | 1,181.9 | 1,135 |
Operating Income | 54.6 | 43.2 | 108.1 | 110.1 |
Logistics | Operating segments | ||||
Segment results | ||||
Operating Revenue | 124.7 | 102.4 | 348.9 | 287.3 |
Operating Income | $ 7.2 | $ 3.5 | $ 16 | $ 7.3 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property and equipment | ||
Cost | $ 2,356.5 | $ 2,151.9 |
Less: Accumulated Depreciation | (1,257.3) | (1,202.7) |
Property and equipment, net | 1,099.2 | 949.2 |
Vessels | ||
Property and equipment | ||
Cost | 1,430.8 | 1,416.1 |
Containers and equipment | ||
Property and equipment | ||
Cost | 543.2 | 536.9 |
Terminal facilities and other property | ||
Property and equipment | ||
Cost | 58.9 | 43.2 |
Vessel construction in progress | ||
Property and equipment | ||
Cost | 296.7 | 124.5 |
Capitalized Interest | ||
Interest Costs Capitalized | 7.4 | 2.9 |
Other construction in progress | ||
Property and equipment | ||
Cost | $ 26.9 | $ 31.2 |
GOODWILL AND INTANGIBLES - CHAN
GOODWILL AND INTANGIBLES - CHANGES IN GOODWILL (Details) - USD ($) $ in Millions | 3 Months Ended | |||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | |
Goodwill [Line Items] | ||||||
Balance at the beginning of the period | $ 323.7 | $ 323.7 | $ 323.7 | $ 245.1 | $ 241.6 | $ 241.6 |
Additions | 0 | 0 | 0 | 79 | 3.5 | 0 |
Balance at the end of the period | 323.7 | 323.7 | 323.7 | 324.1 | 245.1 | 241.6 |
Ocean Transportation | ||||||
Goodwill [Line Items] | ||||||
Balance at the beginning of the period | 218.5 | 218.5 | 218.5 | 218.5 | 215 | 215 |
Additions | 0 | 0 | 0 | 0 | 3.5 | 0 |
Balance at the end of the period | 218.5 | 218.5 | 218.5 | 218.5 | 218.5 | 215 |
Logistics | ||||||
Goodwill [Line Items] | ||||||
Balance at the beginning of the period | 105.2 | 105.2 | 105.2 | 26.6 | 26.6 | 26.6 |
Additions | 0 | 0 | 0 | 79 | 0 | 0 |
Balance at the end of the period | $ 105.2 | $ 105.2 | $ 105.2 | $ 105.6 | $ 26.6 | $ 26.6 |
GOODWILL AND INTANGIBLES - INTA
GOODWILL AND INTANGIBLES - INTANGIBLE ASSETS NET (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-lived Intangible Assets | ||
Total | $ 230.7 | $ 230.7 |
Net Amount | 228 | 236.6 |
Trade Names | ||
Finite-lived Intangible Assets | ||
Indefinite-Lived intangible asset | 27.3 | 27.3 |
Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Less: Accumulated Amortization | (30) | (21.4) |
Net Amount | 200.7 | 209.3 |
Estimated amortization expenses related to intangibles | ||
Net Amount | 200.7 | 209.3 |
Ocean Transportation | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | 140.6 | 140.6 |
Logistics | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | $ 90.1 | $ 90.1 |
CAPITAL CONSTRUCTION FUND (Deta
CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts receivable, net | $ 213.9 | $ 213.9 | $ 189.5 | |
Cash Deposits Into CCF | 52.4 | 64.6 | $ 123.4 | |
Qualifying withdrawal from CCF | 52.4 | 95.8 | $ 12.5 | |
Eligible Accounts Receivable Assigned to CCF | ||||
Accounts receivable, net | $ 175.9 | $ 175.9 | 174.7 | |
Long-term Assets | Cash | ||||
Capital Construction Fund - cash on deposit | $ 31.2 |
DEBT - SUMMARY (Details)
DEBT - SUMMARY (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt | ||
Capital leases | $ 1.1 | $ 2.6 |
Total Debt | 839.3 | 738.9 |
Less current portion | (29.2) | (31.8) |
Total Long-term Debt | 810.1 | 707.1 |
5.79%, payable through 2020 | ||
Debt | ||
Total Debt | $ 21 | $ 24.5 |
Interest rate (as a percent) | 5.79% | 5.79% |
3.66%, payable through 2023 | ||
Debt | ||
Total Debt | $ 54.7 | $ 59.3 |
Interest rate (as a percent) | 3.66% | 3.66% |
4.16%, payable through 2027 | ||
Debt | ||
Total Debt | $ 52.4 | $ 55 |
Interest rate (as a percent) | 4.16% | 4.16% |
3.37 %, payable through 2027 | ||
Debt | ||
Total Debt | $ 75 | $ 75 |
Interest rate (as a percent) | 3.37% | 3.37% |
3.14%, payable through 2031 | ||
Debt | ||
Total Debt | $ 200 | $ 200 |
Interest rate (as a percent) | 3.14% | 3.14% |
4.31%, payable through 2032 | ||
Debt | ||
Total Debt | $ 36.3 | $ 37.5 |
Interest rate (as a percent) | 4.31% | 4.31% |
4.35%, payable through 2044 | ||
Debt | ||
Total Debt | $ 100 | $ 100 |
Interest rate (as a percent) | 4.35% | 4.35% |
3.92%, payable through 2045 | ||
Debt | ||
Total Debt | $ 73.2 | $ 75 |
Interest rate (as a percent) | 3.92% | 3.92% |
5.34%, payable through 2028 | ||
Debt | ||
Total Debt | $ 24.2 | $ 26.4 |
Interest rate (as a percent) | 5.34% | 5.34% |
5.27%, payable through 2029 | ||
Debt | ||
Total Debt | $ 26.4 | $ 28.6 |
Interest rate (as a percent) | 5.27% | 5.27% |
Revolving Credit Facility | ||
Debt | ||
Total Debt | $ 175 | $ 55 |
DEBT - DESCRIPTION - REVOLVING
DEBT - DESCRIPTION - REVOLVING CREDIT FACILITY (Details) - Revolving Credit Facility $ in Millions | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Debt | |
Funds available under the revolving credit facility | $ 464.5 |
Interest rate during period (as a percent) | 2.69% |
ACCUMULATED OTHER COMPREHENSI38
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | $ 494.9 | $ 494.9 | |||||||
Net gain in prior service cost | $ 0.7 | $ 23.4 | 0.8 | $ 24.1 | |||||
Amortization of prior service cost | (2.2) | (0.6) | (2.9) | (1.2) | |||||
Amortization of net loss (gain) | 1 | 0.9 | 3.1 | 3 | |||||
Other adjustments | 0.6 | 0.2 | 0.5 | ||||||
Balance at the end of the period | 518.6 | 518.6 | $ 494.9 | ||||||
Pensions | |||||||||
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | (40.5) | $ (41) | (41.4) | (40.8) | $ (41.3) | $ (41.7) | (41.4) | (41.7) | (41.7) |
Amortization of prior service cost | (0.4) | (0.3) | (0.4) | (0.3) | (0.3) | (0.4) | |||
Amortization of net loss (gain) | 0.8 | 0.8 | 0.8 | 0.8 | 0.8 | 0.8 | |||
Balance at the end of the period | (40.1) | (40.5) | (41) | (40.3) | (40.8) | (41.3) | (40.1) | (40.3) | (41.4) |
Post Retirement | |||||||||
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | 18.5 | 18.2 | 18.1 | (3.6) | (3.8) | (4.7) | 18.1 | (4.7) | (4.7) |
Net gain in prior service cost | 0.7 | 23.4 | 0.7 | ||||||
Amortization of prior service cost | (1.7) | (0.3) | |||||||
Amortization of net loss (gain) | 0.2 | 0.3 | 0.1 | 0.2 | 0.2 | 0.2 | |||
Balance at the end of the period | 17.7 | 18.5 | 18.2 | 19.7 | (3.6) | (3.8) | 17.7 | 19.7 | 18.1 |
Non-Qualified Plans | |||||||||
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | (0.3) | (0.4) | (0.4) | (0.1) | (0.2) | (0.4) | (0.2) | (0.2) | |
Amortization of prior service cost | (0.1) | 0.1 | |||||||
Amortization of net loss (gain) | 0.1 | (0.1) | 0.1 | ||||||
Balance at the end of the period | (0.4) | (0.3) | (0.4) | (0.1) | (0.1) | (0.4) | (0.1) | (0.4) | |
Other | |||||||||
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | 0.4 | 0.3 | 0.1 | (0.4) | (0.4) | (0.3) | 0.1 | (0.3) | (0.3) |
Net gain in prior service cost | 0.1 | ||||||||
Other adjustments | 0.2 | 0.6 | (0.1) | ||||||
Balance at the end of the period | 0.4 | 0.4 | 0.3 | 0.2 | (0.4) | (0.4) | 0.4 | 0.2 | 0.1 |
Accumulated Other Comprehensive Income (Loss) | |||||||||
Changes in accumulated other comprehensive loss by component, net of taxes | |||||||||
Balance at the beginning of the period | (21.9) | (22.9) | (23.6) | (44.8) | (45.6) | (46.9) | (23.6) | (46.9) | (46.9) |
Net gain in prior service cost | 0.7 | 0.1 | 23.4 | 0.7 | |||||
Amortization of prior service cost | (2.2) | (0.3) | (0.4) | (0.6) | (0.2) | (0.4) | |||
Amortization of net loss (gain) | 1 | 1.2 | 0.9 | 0.9 | 1 | 1.1 | |||
Other adjustments | 0.2 | 0.6 | (0.1) | ||||||
Balance at the end of the period | $ (22.4) | $ (21.9) | $ (22.9) | $ (20.5) | $ (44.8) | $ (45.6) | $ (22.4) | $ (20.5) | $ (23.6) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying value | ||
Fair value of financial instruments | ||
Cash and cash equivalents | $ 24.7 | $ 13.9 |
CCF - cash on deposit | 31.2 | |
Variable rate debt | 175 | 55 |
Fixed rate debt | 664.3 | 683.9 |
Fair Value Measurement | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 24.7 | 13.9 |
CCF - cash on deposit | 31.2 | |
Variable rate debt | 175 | 55 |
Fixed rate debt | 664.1 | 685.2 |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 24.7 | 13.9 |
Fair Value Measurement | Significant Observable Inputs (Level 2) | ||
Fair value of financial instruments | ||
CCF - cash on deposit | 31.2 | |
Variable rate debt | 175 | 55 |
Fixed rate debt | $ 664.1 | $ 685.2 |
EARNINGS PER-SHARE (Details)
EARNINGS PER-SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income | ||||
Net Income, Basic | $ 34.1 | $ 25.3 | $ 65.1 | $ 61.4 |
Net Income, Diluted | $ 34.1 | $ 25.3 | $ 65.1 | $ 61.4 |
Weighted Average Common Shares | ||||
Basic (in shares) | 42.9 | 42.8 | 43 | 43.1 |
Effect of Dilutive Securities (in shares) | 0.3 | 0.4 | 0.3 | 0.4 |
Diluted (in shares) | 43.2 | 43.2 | 43.3 | 43.5 |
Per Common Share Amount | ||||
Net income, Basic (in dollars per share) | $ 0.79 | $ 0.59 | $ 1.51 | $ 1.42 |
Effect of Dilutive Securities (in dollars per shares) | (0.01) | (0.01) | ||
Net income, Diluted (in dollars per share) | $ 0.79 | $ 0.59 | $ 1.50 | $ 1.41 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time-based and performance-based shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based compensation | ||||
Shares granted | 6,900 | 304,000 | ||
Weighted-average grant date fair value (in dollars per share) | $ 24.02 | $ 35.99 | ||
Total unrecognized compensation cost | $ 12.5 | $ 12.5 | ||
Unrecognized compensation cost over weighted-average period to be recognized | 1 year 3 months 18 days | |||
Selling, general and administrative expenses | ||||
Share-based compensation | ||||
Total stock-based compensation cost | $ 2.9 | $ 3 | $ 7.8 | $ 9.2 |
PENSION AND OTHER POST-RETIRE42
PENSION AND OTHER POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits | ||
Components of Net Periodic Benefit Costs: | ||
Service cost | $ 3 | $ 3 |
Interest cost | 7.3 | 7.3 |
Expected return on plan assets | (10.1) | (10) |
Amortization of net loss | 3.8 | 4.1 |
Amortization of prior service cost | (1.7) | (1.7) |
Other adjustments | 0.1 | |
Net periodic benefit cost | 2.4 | 2.7 |
Defined Benefit Pension Plan Contributions | ||
Employer contribution | 3 | |
Estimated future contributions to be made during the year | 0 | |
Other Post-retirement Benefits | ||
Components of Net Periodic Benefit Costs: | ||
Service cost | 0.4 | 1.1 |
Interest cost | 0.8 | 2 |
Amortization of net loss | 0.9 | 0.9 |
Amortization of prior service cost | (2.8) | |
Net periodic benefit cost | $ (0.7) | $ 4 |
BUSINESS COMBINATION - CONSIDER
BUSINESS COMBINATION - CONSIDERATION PAID (Details) - USD ($) $ in Millions | Aug. 04, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Assets acquired and liabilities assumed | ||||
Repayments of Span Alaska debt | $ 81.9 | |||
Span Alaska | ||||
Business acquisition | ||||
Percentage interest acquired | 100.00% | |||
Total cash consideration | ||||
Membership interests | $ 117 | |||
Total debt assumed | 81.9 | |||
Total payments | 198.9 | |||
Assets acquired and liabilities assumed | ||||
Unallocated purchase price recorded as goodwill | $ 78.6 | |||
Condensed Consolidated Statements of Income and Comprehensive Income | ||||
Operating revenue | $ 15.3 | $ 44.1 | ||
Intercompany revenue elimination | 9.5 | 24 | ||
Operating Income | $ 4.6 | $ 10.5 |
BUSINESS COMBINATION - PROFORMA
BUSINESS COMBINATION - PROFORMA (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pro-forma Combined | ||||
Operating revenue | $ 543.9 | $ 505.4 | $ 1,530.8 | $ 1,454.9 |
Net income | $ 34.1 | $ 26.6 | $ 65.1 | $ 65.3 |
Basic Earnings Per Share (in dollars per share) | $ 0.79 | $ 0.62 | $ 1.51 | $ 1.52 |
Diluted Earnings Per Share (in dollars per share) | $ 0.79 | $ 0.62 | $ 1.50 | $ 1.50 |
Weighted Average Number of Shares Outstanding: | ||||
Basic | 42.9 | 42.8 | 43 | 43.1 |
Diluted | 43.2 | 43.2 | 43.3 | 43.5 |